Rather than being left as stranded as the fossil fuels they once pumped, the country’s hundreds of service stations should sell biofuel and charge EVs, the Climate Commission is told

Emerging biofuel technologies could be better than electric vehicles at reducing the transport sector’s enormous share of climate gas emissions, the country’s biggest petroleum users argue.

Z Energy chief executive Mike Bennetts is fronting a big group of business leaders, whose firms are responsible for nearly 60 percent of the country’s climate emissions, calling for the Government to provide funding support for local biofuels generation plants.

Z Energy mothballed its biofuel plant in Wiri, because it wasn’t cost effective to manufacture small quantities of biodiesel from meat tallow – but it is proposing to build a much bigger, more cost-effective plant to meet many of the country’s fuel needs. It says biofuel plants could diversify beyond using leftover tallow from the meatworks, and could also produce fuel from the wood residue left behind by logging.

The Climate Change Commission draft advice says biofuels should make up 3 percent of the transport market by 2035 – about seven times what Z Energy could produce at its Wiri plant. But Z and other biofuel advocates say that recommendation is “conservative”.

Does biofuel provide a more cost-effective way to transition our transport fleet, when electric vehicles are still too expensive for many households? Click here to comment.

The engineering capability has advanced considerably since Z built that plant, the company says in a submission. To make biofuels commercially viable, Z Energy wouldn’t built a new plant seven times the size of Wiri – it would build one about 20 times bigger.

Mike Bennetts said they could produce 8 million litres of biodiesel if they brought the Wiri plant out of hibernation – but the biofuel plant they would like to build would produce 100 to 200 million litres.

According to Z Energy, studies show the potential to use forestry residues as well as from tallow, town waste and, to a lesser extent, used cooking oil and whey. Energy crops that do not compete with food production are also being actively investigated by several local organisations.

“There’s nothing wrong with self-interest in the pursuit of good.”
– Mike Bennetts, Z Energy

According to Crown-research institute Scion, the country could convert 4 million tonnes of forestry residue to more than 700 million litres of biofuel. And 140,000 tonnes of inedible tallow could make 140 million litres of biodiesel.

“The affordability of individual EVs can be challenging for many New Zealanders and their businesses,” Z Energy says, in arguing for feebate-type subsidies to buy EVs, car-sharing services like its subsidiary Mevo – and a far greater reliance on biofuels to decarbonise transport. Biofuels don’t eliminate emissions – like any fuel, they still emit climate gases when they are burned. But until they’re burned, the plants they’re made from sequester carbon.

Bennetts acknowledged Z Energy was more ambitious about biofuels than EVs – convenient given they were leading the development of biofuels whereas EVs were a threat to their business. ” I think that’s a fair comment,” he told Newsroom.

“What I’d say is, there’s nothing wrong with self-interest in the pursuit of good. And it plays to what we’re good at. Liquid fuels and using existing infrastructure – that’s really, really valuable to our customers.”

In January, Prime Minister Jacinda Ardern visited the mothballed biodiesel plant at Wiri to announce plans for a Clean Car Import Standard and plans to require fuel companies to pump lower-emitting biofuel blends.

Bennetts said: “One of the beautiful things about biofuels is you just blend it into the existing fossil fuels at whatever the limit is allowed.”

Sustainable Aviation Fuel

Air NZ, another big fossil fuel user, has welcome the Climate Change Commission’s acknowledgement that aviation is a “hard-to-abate” sector. 

“For long-haul air travel, Sustainable Aviation Fuel is the only current option for decarbonisation,” says David Morgan, Air NZ’s Chief Operational Integrity and Safety Officer.

Like Z Energy, the airline highlights the potential of woody biomass left over from logging. But it says there are other viable feedstock options available like municipal solid waste, sugar beet, and power-to-liquid technology.

Morgan argues air transport is critical to New Zealand’s export, investment, and tourism industries. And if the airline can’t reduce emissions through biofuels then it will just have to plant more trees. 

“It plays an essential role connecting our people and products to the world, and the world to us. Covid-19 has highlighted the significant economic benefit tourism provides to New Zealand and has demonstrated the criticality of local connectivity to New Zealand’s primary production sector.”

Sustainable Aviation Fuel (SAF) is already available internationally. Air NZ is part of a consortium alongside Z Energy, the forestry Crown-research institute Scion and the waste gas tech company Lanzatech investigating its local potential. Air NZ wants to build a plant that can produce 40 million litres of SAF a year.

Z Energy chief executive Mike Bennetts is also convenor of the Climate Leaders Coalition, a business grouping that has partnered with the Sustainable Business Council to put forward a submission representing more than 150 businesses.

“Our businesses acknowledge that ‘business as usual’ is no longer an option. Now is our moment to be ambitious and put our society and economy on a trajectory towards intergenerational prosperity,” he says, in a press statement.

The companies represented in the Climate Leaders Coalition represent nearly one third of New Zealand’s GDP and nearly 60 per cent of gross emissions. For some like Air NZ, their share of liability is forecast to increase as others reduce emissions while the airline does the opposite, working to gets its longhaul flights running again, post-Covid.

In their submission, they call for the Government to provide funding support for local biofuels generation plants (gaseous and liquid), waste generators, and biomass producers to meet forecast raw product demand.

“The Commission has made references to the potential for biofuels as a transitional, and long-term, fossil fuel replacement for vehicles and aircraft,” they argue. “We believe that this is a key area where government and business leadership could have a large impact on carbon emissions reductions in the short to medium term.”

Heavy trucks

A study by the Sustainable Business Council’s freight group, made up of nine companies representing the freight industry, investigated decarbonising that sector. The study leaders have briefed Climate Change Commission staff on their work – and they say there is greater potential to reduce emissions than the commission had recognised in its draft advice.

By 2030, 28 per cent of net emissions reductions can be achieved through existing options like improved vehicle efficiencies, allowing longer trucks, telemetrics, freight flow optimisation and mode shift. This would require Government support for a move to more coastal shipping and rail infrastructure.

The remainder of emissions would require an increasing uptake of biofuels or hydrogen, especially from 2030. “Now is the time to act to remove barriers for those technologies so the scale of transformation is feasible,” the Sustainable Business Council argues. “These barriers include high capital cost for hydrogen vehicles, and failures in the biofuels market.”

Biofuel in buses

Auckland Transport is to unveil the country's first hydrogen fuel cell bus this afternoon. Digital montage: Supplied
Auckland Transport is to unveil the country’s first hydrogen fuel cell bus this afternoon. Digital montage: Supplied

Auckland Transport, too, is pushing for biofuel to be a part of the solution. Through the bus fleets it contracts to serve Auckland, it is responsible for more transport emissions than any other organisation in the region.

In a joint submission with Auckland Council, it says New Zealand should be a pilot area for new technologies like allowing a biodiesel fuel to be sold without road user chargers to allow zero carbon transition, and supporting local government to revisit the “stump to pump” biofuel study into using waste from pine industry to create biofuels.

But Auckland Transport’s first focus is not biofuel – indeed, it has committed to phasing out diesel buses. To retain their Auckland Transport contracts, bus companies have already been told they may not buy any more diesel buses. 

This afternoon Auckland Transport has invited Transport Minister Michael Wood and Mayor Phil Goff down to Bledisloe Wharf, to launch the country’s first hydrogen fuel cell bus – manufactured here in New Zealand by a Christchurch company.

The bus is to be trialled on a route from the Britomart central city transport hub to Botany, in east Auckland. Ports of Auckland had built the city’s first hydrogen refuelling facility, to support the trial.

Refining plant

Refining NZ is considering the future of its port and refinery south of Whangarei, after booking an annual loss of $198.2 million.

In a market disclosure last month, chief executive Naomi James noted that one option was closing the refinery and operating the Marsden Point site solely as an import terminal.

Or, she said, Marsden Point could be repurposed as a fuels and energy hub, with the potential to support future production, storage, handling, import and export of energy sources – including biofuels and sustainable aviation fuel.

Newsroom Pro managing editor Jonathan Milne covers business, politics and the economy.

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